OPEC+ is set to agree on another small increase in production targets for June, delegates from the group say, as expectations that sanctions will crimp Russian output further counter demand growth concerns from Chinese lockdowns, reports Reuters.
OPEC+ ministers are set to meet on Thursday and are expected to agree to raise production targets by 432,000 barrels per day (bpd) for June, four OPEC+ delegates told Reuters.
Under a deal reached in July last year, the group is set to increase output targets by 432,000 bpd every month until the end of September, to unwind its remaining production cuts.
In late March, it agreed to go ahead with the planned output increase for May.
The OPEC+ meeting this week comes against the backdrop of a major announcement from the European Union which on Wednesday proposed a phased oil embargo on Russia in its toughest measures yet to punish Moscow for its war in Ukraine. Read full story
OPEC Secretary-General Mohammad Barkindo, in a speech seen by Reuters to a meeting of the OPEC+ Joint Technical Committee which took place on Wednesday, said it was not possible for other producers to replace Russian supply.
"What is clear is that Russia's oil and other liquids exports of more than 7 million bpd cannot be made up from elsewhere. The spare capacity just does not exist," he said.
"However, its potential loss, through either sanctions or voluntary actions, is clearly rippling through energy markets."
Oil prices jumped by more than 4% on the EU announcement, with Brent crude LCOc1 rising to near $110 a barrel.